Acceptable investments: Active Investor Plus

A direct investment is an investment in which the decision to invest is made by you, into a privately-held business. Direct investments must be approved by New Zealand Trade & Enterprise (NZTE).

Acceptable investments — NZTE website

A direct investment must be invested in:

• listed equities (such as shares in a company) that meet the criteria for an acceptable investment as a wholesale investor
• an equity security (such as shares in a company) in an investee entity (a New Zealand based company that is not listed on a public stock exchange), or
• another financial product that allows you to purchase shares in a company at a later date (for example, a convertible note, preference share or Simple Agreement for Future Equity) that will be converted, or is convertible, into an equity security in an investee entity.

Investments for wholesale investors — Financial Markets Authority

NZTE must also confirm that:

• your investment in listed equities as a wholesale investor was pre-approved by them before your funds were invested, or
• your investee entity is an acceptable direct investment.

Once the funds have been invested you must:

• have direct ownership interest in the company
• have sole beneficial interest in a trust whose trustee has direct ownership interest in the company, or
• have set up and appointed a nominee company whose role is to hold the shares in the company on your behalf.

A managed fund invests in various assets on your behalf. These assets are picked by the fund's manager and their team.

Managed funds — Financial Markets Authority

Managed fund investments for the Growth category must be invested in:

• a managed fund that is on the acceptable managed fund list maintained by New Zealand Trade & Enterprise (NZTE), or
• a discretionary investment management service that is on the acceptable managed fund list maintained by NZTE.

Acceptable investments — NZTE website

Managed fund investments for the Balanced category must be invested in:

• a managed fund that is on the acceptable managed fund list maintained by NZTE
• a discretionary investment management service that is on the acceptable managed fund list maintained by NZTE
• a managed fund that holds acceptable listed equity investments
• a managed fund that holds acceptable property development investments, or
• a managed fund that holds acceptable bond investments.

Check the other sections on this page for more information on what an acceptable listed equity, property development or bond investment is.

If you invest in property developments through a managed fund, we will only consider the percentage of the investment that is invested in New Zealand property developments as acceptable. For example, if 50% of a managed fund is invested in New Zealand property developments, only 50% of your investment will be acceptable.

Agreement with a fund manager

You must have a legal agreement with the fund manager or their nominee (such as an investment company) that shows you have agreed to:

• acquire managed investment products in an acceptable managed investment scheme, or
• receive a discretionary investment management service (DIMS).

Any funds covered by this legal agreement that you have committed to invest are considered invested (for the purpose of your investor visa application) once the agreement has been signed by both parties.

On-call investments

If you have committed to invest funds in a managed fund under the Growth or Balanced category, you can invest the funds in on-call investments while they are waiting to be used by the fund manager.

Any funds used for on-call investments must be:

• part of legal agreement between you and the fund manager or their nominee
• managed by you or on your behalf by a bank, investment broker or financial advisor, and
• maintained at the NZD amount that you have committed to invest (minus any amount that has already been invested into the managed fund).

On-call investments must also:

• be able to be liquidated (sold) at the request of the fund manager
• be invested in New Zealand in New Zealand dollars, and
• be invested in either acceptable listed equities or bonds.

You can also temporarily place committed funds in a New Zealand bank account or a term deposit for up to 6 months while they are waiting to be used by the fund manager.

You cannot withdraw committed funds in on-call investments unless:

• you are selling the on-call investments to transfer to the fund manager
• you are transferring them to another acceptable on-call investment, or
• you are using the funds to pay costs such as taxes or fees.

If the NZD value of your on-call investment falls below the amount you have committed to, you can nominate additional funds to make up the difference. Any additional funds you nominate must meet our ownership requirements and must have been acquired legally.

Transferring investment funds: Active Investor Plus

Listed equities are equities listed on a public stock exchange (such as the New Zealand Stock Exchange). They can include shares in an individual company or exchange traded funds (ETFs).

Listed equity investments must be invested in:

• shares or stock of a company
• an ETF, or
• a managed fund that holds acceptable listed equities, and that is licensed by the Financial Markets Authority.

Managed funds — Financial Markets Authority

The investment must be for a New Zealand resident entity (such as a company) that is:

• listed by a market operator licensed by the Financial Markets Authority
• offered through a crowdfunding provider licensed by the Financial Markets Authority, or
• an equity in a New Zealand registered bank.

Tax residency status for companies — Inland Revenue

Market operators — Financial Markets Authority

Crowdfunding service providers — Financial Markets Authority

Philanthropy is a donation to a New Zealand registered charity.

Philanthropy investments must be donated to organisations that:

• are a registered charity with at least 2 years of annual financial returns, and
• have current Inland Revenue donee status.

Approved donee organisations — Inland Revenue

Bonds are when you lend money to a bond issuer (such as a government, council or company), for a set period of time at a fixed interest rate.

Bonds — Financial Markets Authority

Bond investments must be:

• issued by the New Zealand government or a local authority (such as a city or district council)
• issued by a New Zealand Resident Entity and traded on the New Zealand Debt Securities Market (NZDX)
• issued by a New Zealand firm with at least a BBB- or equivalent credit rating from an internationally recognised credit rating agency
• issued by New Zealand registered banks, or
• in finance companies that meet our criteria for finance company bonds.

Government Securities — The Treasury

Investors — New Zealand Local Government Funding Agency

Tax residency status for companies — Inland Revenue

Bonds — Financial Markets Authority (page 19 has an explanation on bond credit ratings)

Finance company bonds

If you invest in finance company bonds the company must:

• be a wholly-owned subsidiary of
• raise capital solely for, and
• have all its debt securities unconditionally guaranteed by a New Zealand Stock Exchange listed company or a local authority.

Property developments are projects that aim to build more residential, commercial or industrial property in New Zealand.

Property development investments must be invested in:

• a new residential property development
• a new commercial property investment
• a new industrial property development
• an existing commercial property development (with the purpose of improving the property), or
• an existing industrial property development (with the purpose of improving the property).

Residential property developments

Residential property developments must be for people to live in, and must:

• be for new developments on new or existing sites that will increase the housing stock of New Zealand (they must be for multiple dwellings), and
• be for the purpose of making a commercial return in the open market (this includes rental returns).

The development also must have had any required resource consents approved by the relevant regulatory or local authorities. If the development does not have these, you must provide evidence that any required resource consents have been submitted to and accepted for processing by the local authority.

Residential property developments cannot:

• be renovations or extensions to existing buildings
• be lived in by you or anyone included in your investor visa application
• be lived in by anyone related to you, or
• be lived in by anyone related to someone included in your investor visa application.

Commercial and industrial property developments

The purpose of new commercial and industrial property development investments must be to develop property for a productive business purpose and generate a commercial return on the open market.

The purpose of existing commercial and industrial property development investments must be to improve the property. The improvement plans must be provided to and approved by us.

The development also must have had any required resource consents approved by the relevant regulatory or local authorities. If the development does not have these you must provide evidence that any required resource consents have been submitted to and accepted for processing by the local authority.

Commercial and industrial property developments cannot:

• be for residential use (people cannot live in the development)
• be for vacant land (unless plans for the development have been submitted to regulatory authorities and work has started)
• be lived in by you or anyone included in your investor visa application
• be lived in by anyone related to you, or
• be lived in by anyone related to someone included in your investor visa application.

Industrial properties can include (but are not limited to) warehouses, manufacturing, distribution, and logistical facilities.

Property developments on sensitive land

If the property development you invest in is located on sensitive land you must have evidence:

• that consent for the purchase has been granted under the Overseas Investment Act (2005), or
• that the transaction is exempt from the requirement for consent under the Overseas Investment Act.

Evidence can include:

• a notice published by the regulator under the Overseas Investment Act 2005 (Land Information New Zealand), or
• a letter from a New Zealand lawyer confirming that an exemption applies.

Identifying sensitive land — Land Information New Zealand

If your property development investment is on sensitive land and meets these requirements at the time of investment, we will continue to consider it an acceptable investment throughout the 60-month investment period.

Property investments made through a managed fund

If you are investing into property development through a managed fund the managed fund must:

• raise funds for residential, commercial, or industrial property development
• invest in New Zealand companies only, and
• be a managed fund investment product offered by a financial institution, or invested in equities or debt and managed on your behalf by a fund manager or broker.

The underlying investments of the fund must meet the requirements of an acceptable property investment, for example funding a new development on either new or existing sites which increases housing stock or funding a commercial property development that is making improvements to the property.

You must provide a legally binding, non-revocable agreement between the yourself and the fund manager or a nominee (such as an investment company) made under New Zealand law.

You should provide:

• bank statements that show funds have been transferred to the Direct Investment
• a letter from NZTE confirming that the direct investment is approved by them
• the company register extract
• a shareholder agreement or share subscription agreement.

You should provide:

• bank statements that show your funds have been transferred to the Managed Fund
• your legal agreement between you and the fund manager or a nominee (such as an investment company).

You should provide:

• bank statements that show your funds have been transferred to an investment portfolio
• trade reports, transaction reports, holding reports and cash account transaction reports from your investment portfolio.

You should provide:

• bank statements that show your funds have been transferred to the organisation
• a letter from the charity organisation confirming the funds have been donated
• evidence that the charity has current Inland Revenue donee status.

You should provide:

• bank statements that show your funds have been transferred to an investment portfolio
• trade reports, transaction reports, holding reports and cash account transaction reports from your investment portfolio.

You should provide:

• evidence that funds have been transferred to the property development project.
• a sales and purchase agreement, if applicable.
• property development plans including a design plan, or improvement plan (if commercial).
• evidence required consents have been gained.
• a letter from a New Zealand lawyer confirming that a class exemption applies, if the development is on sensitive land and a notice has not been published on the Overseas Investment Office website that consent has been gained or is exempt.